Autobytel Reports Results for First Quarter 2004
IRVINE, Calif.--April 22, 2004--Leading Internet automotive marketing services company Autobytel Inc. today announced financial results for the first quarter ended March 31, 2004.Highlights for the quarter:
-- Net income of $2.1 million, or $0.05 per diluted share, a 138% increase quarter over quarter
-- Cash generation of $2.6 million and cash balance of $64.3 million at the end of Q1, excluding cash in Autobytel.Europe of $10.4 million
-- Revenues at a record $24.8 million, highest revenues in the Company's history and 22% growth quarter over quarter
-- Purchase Requests at 860,000, a 12% sequential increase
-- Retail dealers added on a net basis for the third consecutive quarter
"This was a terrific quarter operationally, resulting in the highest quarterly revenues in Autobytel's history," said Autobytel President and CEO Jeffrey Schwartz. "We added dealers, increased Purchase Requests, and lowered our traffic acquisition costs. The market for our products and services is expanding, and we continue to make orderly progress toward exceeding our financial objectives for the year. We continue to invest in and build the Company for the market opportunity that we feel will be substantial in the coming years."
Autobytel reported net income for the first quarter ended March 31, 2004 of $2.1 million, or $0.05 per diluted share, versus $3.8 million, or $0.09 per diluted share, reported for the fourth quarter ended December 31, 2003. As previously reported by the Company, fourth quarter net income included two beneficial items totaling $1.7 million related to a decrease in the allowance for bad debts and a settlement with a former employee of Autoweb. The net income of $2.1 million in the first quarter represents a 138% increase over net income of $0.9 million, or $0.03 per diluted share, for the first quarter ended March 31, 2003.
Revenues for the first quarter ended March 31, 2004 totaled $24.8 million, a 3% sequential increase over revenues of $23.9 million for the fourth quarter ended December 31, 2003, and a 22% increase over revenues of $20.3 million for the first quarter ended March 31, 2003.
The Company generated $2.6 million in cash during the first quarter of 2004. The Company's cash balance, including long term marketable securities of $15.0 million, was $64.3 million as of March 31, 2004, excluding cash in Autobytel.Europe of $10.4 million.
Highlights for the First Quarter
Revenues: As the Company has previously communicated, beginning in the first quarter of 2004, revenues are being reported in the new categories of Lead Fees, Advertising, CRM Services, and Data, Applications & Other.
The rationale for the new classification is to better align reported numbers and metrics with internal operations and to provide increased understanding and transparency for investors. Lead Fees represent fees that are paid by retail dealers and OEMs for the generation of new and used car sales leads. Advertising represents fees paid by marketers to advertise their products/services on Autobytel's websites. CRM Services represent fees paid by dealers and OEMs for services that help them automate the sales process and improve customer loyalty and retention marketing. Data, Applications & Other represent fees paid by dealers, OEMs and third parties for the licensing of automotive price and specification data and applications, as well as for other products.
First quarter revenues were $24.8 million. During the first quarter, $16.8 million was related to Lead Fees; $3.1 million was related to Advertising; $3.5 million was related to CRM Services, and $1.3 million was related to Data, Applications & Other. For comparative purposes, under this new classification, fourth quarter 2003 revenues of $23.9 million would have been classified as $16.0 million related to Lead Fees; $3.2 million related to Advertising; $3.3 million related to CRM Services, and $1.4 million related to Data, Applications & Other. First quarter 2003 revenues of $20.3 million would have been classified as $14.6 million related to Lead Fees; $2.8 million related to Advertising; $1.5 million related to CRM Services, and $1.3 million related to Data, Applications & Other. The data is shown in tabular format in Exhibit 1.
Operating Expenses: Total operating expenses, including depreciation and amortization, in the first quarter were $22.8 million. Sales and marketing expenses totaled $14.8 million, including traffic acquisition costs. Product development and technology costs totaled $5.1 million. General and administrative costs totaled $2.9 million. As previously disclosed, sales and marketing expenses in the fourth quarter benefited by $0.9 million related to a change in estimates of bad debt.
Unique Visitor Count: Autobytel's four websites - Autobytel.com, Autoweb.com, Carsmart.com and AutoSite.com - received approximately 6.5 million average monthly unique visitors in the first quarter, and ranked as the most visited new car buying and research network in both February and March 2004, as reported by comScore Media Metrix.
Purchase Requests: The Company delivered approximately 860,000 Purchase Requests during the first quarter of 2004, a 12% sequential increase compared to 765,000 Purchase Requests delivered in the fourth quarter of 2003.
Dealer Count: The Company reported approximately 29,400 dealer relationships in the first quarter. Included in this number are about 24,400 relationships in the Lead Fees category, of which 5,500 were retail dealer relationships and 18,900 were enterprise relationships. Additionally, about 5,000 relationships were in the CRM Services category. "We are seeing strength across our key dealer categories," continued Schwartz. "Web Control(R) and RPM(SM) brought on a net of 200 dealers, and we added a net of almost 200 dealers to our retail lead business. We are pleased that the churn rate continues to stabilize to its lowest level in two years."
Advertising: Revenues from Advertising for the first quarter ended March 31, 2004 were $3.1 million, versus revenues of $3.2 million for the fourth quarter ended December 31, 2003 and revenues of $2.8 million for the first quarter ended March 31, 2003. Management continues to see advertising as a growth business moving forward.
CRM: Autobytel's customer loyalty and retention program, RPM(SM), ended the quarter with 452 dealers and now has 12 automotive manufacturers and major dealer groups who endorse and/or co-op the program, setting the stage for continued growth in 2004. Autobytel's lead management program Web Control(R) continued to enroll Mitsubishi dealers onto its program in the first quarter, with 400 dealers now activated.
Headcount: The Company's headcount was 328 as of March 31, 2004 versus 333 employees as of December 31, 2003.
Quality Initiatives: Closing ratios for Autobytel's retail dealers remained strong at 17%. During the quarter, Autobytel introduced another upgrade to its Quality Verification System(SM) (QVS(SM)), enabling dealers to respond even more quickly to consumer Purchase Requests. By accelerating QVS' seven-step validation process, the average Purchase Request delivery time has been improved by 60%, to an average of eight minutes.
International: In accordance with FIN 46R, effective March 31, 2004, Autobytel.Europe is consolidated in the Company's balance sheet, which includes Autobytel.Europe's cash balance of $10.4 million. The accrued international restructuring liability of $1.9 million as of March 31, 2004 primarily represents payments to be made to Autobytel.Europe licensees under agreements entered into in March 2002 in connection with Autobytel.Europe's restructuring. Since FIN 46R was adopted on March 31, 2004, the results of operations of Autobytel.Europe will be consolidated into the Company's financial statements beginning on April 1, 2004. Autobytel's current ownership position is 49% of Autobytel.Europe. Exhibit 2 shows the balance sheet with the amounts attributable to Autobytel.Europe.
Business Outlook: "We are seeing increasing growth in our business, which we expect will be enhanced by the recently announced acquisitions of iDriveonline and Stoneage. We have given 2004 guidance of between $120 million and $125 million in revenue and approximately $0.25 of earnings per share. We feel confident of achieving this, and we will provide further updates as the business continues to develop throughout the year," concluded Schwartz.
Conference Call
In conjunction with Autobytel Inc.'s first quarter 2004 earnings release, there will be a conference call broadcast live over the Internet today, April 22, 2004, at 4:30 PM EDT (1:30 PM PDT). The Webcast will be archived within 2 hours of the end of the call until the next quarter's earnings announcement. The link to the Webcast conference is as follows:
http://www.irconnect.com/abtl/conf/1q2004.html
About Autobytel Inc.
Autobytel Inc. , a leading Internet automotive marketing services company, helps retailers sell cars and manufacturers build brands through marketing, advertising, data and CRM (customer relationship management) tools and programs. The Company owns and operates the automotive websites Autobytel.com, Autoweb.com, Car.com, Carsmart.com, and AutoSite.com, as well as AIC (Automotive Information Center), a trusted industry source of automotive marketing data and technology for over 20 years. Autobytel is also a leader in dealership lead management and CRM solutions and owns and operates AVV, Inc., a top provider of dealership CRM and sales management tools, and Real Performance Marketing, Inc. (RPM), which powers dealerships with cutting-edge customer loyalty and retention marketing programs. As the Internet's largest new car buying service, Autobytel generates over a billion dollars a month in car sales for dealers through its services and was the most visited new car buying and research destination in 2003, reaching millions of car shoppers as they made their vehicle buying decisions. Autobytel's car-selling sites and lead management tools are used by more of the nation's e-Dealer 100 than any other program.
Autobytel Inc.
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except share and per share data)
ASSETS
March 31, December 31,
2004 2003
(unaudited)
Current assets:
Domestic cash and cash equivalents $49,270 $51,643
International cash and cash equivalents 10,425 -
Short-term investments - 3,991
Accounts receivable, net of allowance for bad
debts and customer credits of $2,117 and
$1,764, respectively 10,597 10,889
Prepaid expenses and other current assets 1,146 833
Total current assets 71,438 67,356
Long-term investments 15,000 6,000
Property and equipment, net 2,123 2,138
Capitalized software, net 754 1,024
Investment in equity investee 824 2,810
Goodwill 16,830 16,830
Other assets 824 470
Total assets $107,793 $96,628
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,255 $4,063
Accrued expenses 3,590 5,034
Deferred revenues 3,814 4,022
Accrued domestic restructuring 212 258
Accrued international restructuring 1,915 -
Other current liabilities 405 441
Total current liabilities 14,191 13,818
Minority interest 4,472 -
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value; 11,445,187
shares authorized - -
Common stock, $0.001 par value; 200,000,000
shares authorized; 38,570,537 and 37,786,767
shares issued and outstanding, respectively 39 38
Additional paid-in capital 238,962 236,544
Accumulated other comprehensive loss 1,836 -
Accumulated deficit (151,707) (153,772)
Total stockholders' equity 89,130 82,810
Total liabilities and stockholders' equity $107,793 $96,628
Autobytel Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollar amounts in thousands, except share and per share data)
(unaudited)
Three Months Ended
March 31,
2004 2003
Revenues:
Lead fees $16,847 $14,623
Advertising 3,122 2,839
CRM services 3,463 1,452
Data, applications and other 1,325 1,339
Total revenues 24,757 20,253
Operating expenses:
Sales and marketing 14,809 12,858
Product and technology development 5,088 3,862
General and administrative 2,929 2,785
Total operating expenses 22,826 19,505
Income from operations 1,931 748
Interest income 186 69
Income (loss) in equity investee (53) 53
Other income 1 -
Income before income taxes 2,065 870
Provision for income taxes - 2
Net income $ 2,065 $ 868
Net income per share:
Basic $ 0.05 $ 0.03
Diluted $ 0.05 $ 0.03
Shares used in computing net income per share:
Basic 38,343,958 31,234,243
Diluted 42,583,103 32,167,910
Autobytel Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands, except share and per share data)
(unaudited)
Three Months
Ended March 31,
2004 2003
Cash flows from operating activities:
Net income $2,065 $868
Adjustments to reconcile net income to net cash
provided by operating activities:
Non-cash charges:
Depreciation and amortization 688 608
Provision for bad debt 77 242
Customer credits 33 851
(Income) loss in equity investee 53 (53)
Changes in assets and liabilities:
Accounts receivable 268 (1,289)
Prepaid expenses and other current assets (284) 1,093
Other assets (399) 11
Accounts payable 87 375
Accrued expenses (1,722) (1,441)
Deferred revenues (208) (47)
Customer deposits - (7)
Accrued domestic restructuring - current (46) (36)
Other current liabilities (38) (18)
Accrued domestic restructuring - non current - (32)
Net cash provided by operating activities 574 1,125
Cash flows from investing activities:
Maturities of short-term investments 3,991 -
Purchases of long-term investments (9,000) -
Consolidation of Autobytel.Europe cash balance 10,425 -
Decrease in restricted cash - 28
Purchases of property and equipment (357) (31)
Net cash provided by (used in)
investing activities 5,059 (3)
Cash flows from financing activities:
Net proceeds from sale of common stock 2,419 136
Net cash provided by financing activities 2,419 136
Effect of exchange rates on cash - 27
Net increase in cash and cash equivalents 8,052 1,285
Cash and cash equivalents, beginning of period 51,643 27,543
Cash and cash equivalents, end of period $59,695 $28,828
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes $- $2
Cash refunded during the period for interest $(1) $-
EXHIBIT 1
Autobytel Inc.
REPORTED REVENUE UNDER NEW CLASSIFICATIONS
(Dollar amounts in thousands)
(unaudited)
Three Months Ended
03/31/03 06/30/03 09/30/03 12/31/03 03/31/04
Lead fees $14,623 $15,508 $15,672 $15,986 $16,847
Advertising 2,839 3,024 2,787 3,169 3,122
CRM services 1,452 2,068 3,129 3,333 3,463
Data, applications
and other 1,339 1,121 1,451 1,442 1,325
Total revenues $20,253 $21,721 $23,039 $23,930 $24,757
EXHIBIT 2
Autobytel Inc.
CONSOLIDATING BALANCE SHEET
As of March 31, 2004
(Dollar amounts in thousands, except share and per share data)
(unaudited)
Autobytel Elimi- Consolidated
ASSETS Autobytel .Europe nation Autobytel
Current assets:
Domestic cash and cash
equivalents $49,270 $- $- $49,270
International cash and
cash equivalents - 10,425 - 10,425
Short-term investments - - - -
Accounts receivable, net
of allowance for bad
debts and customer
credits of $2,117 10,511 86 - 10,597
Prepaid expenses and
other current assets 1,117 29 - 1,146
Total current assets 60,898 10,540 - 71,438
Long-term investments 15,000 - - 15,000
Property and equipment,
net 2,122 1 - 2,123
Capitalized software, net 754 - - 754
Investment in equity
investee 2,757 824 (2,757) 824
Goodwill 16,830 - - 16,830
Other assets 824 - - 824
Total assets $99,185 $11,365 $(2,757) $107,793
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,150 $105 $- $4,255
Accrued expenses 3,312 278 - 3,590
Deferred revenues 3,814 - - 3,814
Accrued domestic
restructuring 212 - - 212
Accrued international
restructuring - 1,915 - 1,915
Other current liabilities 403 2 - 405
Total current liabilities 11,891 2,300 - 14,191
Minority interest - - 4,472 4,472
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par
value; 11,445,187 shares
authorized - - - -
Common stock, $0.001 par value;
200,000,000 shares authorized;
38,570,537 shares issued and
outstanding 39 18 (18) 39
Additional paid-in
capital 238,962 20,338 (20,338) 238,962
Accumulated other
comprehensive loss - 3,746 (1,910) 1,836
Accumulated deficit (151,707) (15,037) 15,037 (151,707)
Total stockholders'
equity 87,294 9,065 (7,229) 89,130
Total liabilities and
stockholders' equity $99,185 $11,365 $(2,757) $107,793